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ITV shares fall as investors cool on bid after Comcast denies holding talks ITV shares fall as investors cool on bid after Comcast denies holding talks
(about 1 hour later)
ITV’s share price has fallen by almost 3% in early trading as investors cooled on speculation about a possible takeover bid after NBC Universal-owner Comcast categorically denied it has held talks about a bid.ITV’s share price has fallen by almost 3% in early trading as investors cooled on speculation about a possible takeover bid after NBC Universal-owner Comcast categorically denied it has held talks about a bid.
Investors excited about the prospect of an £11bn-plus takeover sent ITV’s shares up more than 4% at one point on Monday, following a weekend report that the broadcaster had held talks with Comcast.Investors excited about the prospect of an £11bn-plus takeover sent ITV’s shares up more than 4% at one point on Monday, following a weekend report that the broadcaster had held talks with Comcast.
However, Comcast, which has run the rule over ITV as a potential takeover target in the past, released a strenuous denial that there was any deal in the offing.However, Comcast, which has run the rule over ITV as a potential takeover target in the past, released a strenuous denial that there was any deal in the offing.
“We don’t comment on merger and acquisition rumours, but the speculation on ITV is just completely inaccurate,” said Comcast in a statement.“We don’t comment on merger and acquisition rumours, but the speculation on ITV is just completely inaccurate,” said Comcast in a statement.
ITV, which tellingly did not issue a stock market statement about the supposed talks as it is required to do if there is an M&A move of material importance to investors, refused to comment.ITV, which tellingly did not issue a stock market statement about the supposed talks as it is required to do if there is an M&A move of material importance to investors, refused to comment.
ITV’s share price had fallen by 2.5% by 10.30am Tuesday as investors’ hopes of a big pay day from a takeover dissipated. By comparison the FTSE100 is so far slightly up.ITV’s share price had fallen by 2.5% by 10.30am Tuesday as investors’ hopes of a big pay day from a takeover dissipated. By comparison the FTSE100 is so far slightly up.
“ITV has a chief executive who talks to other media companies, not to look to flog ITV, but to see what they are up to, it’s standard practice,” said one City source. “[Adam] Crozier talking to rival media companies is misinterpreted sometimes. It’s his job.”“ITV has a chief executive who talks to other media companies, not to look to flog ITV, but to see what they are up to, it’s standard practice,” said one City source. “[Adam] Crozier talking to rival media companies is misinterpreted sometimes. It’s his job.”
Despite the Comcast speculation falling flat, ITV is seen as a likely candidate for a takeover by a foreign media owner in the medium term.Despite the Comcast speculation falling flat, ITV is seen as a likely candidate for a takeover by a foreign media owner in the medium term.
The broadcaster has invested heavily in building up its content business to decrease the traditional reliance on TV advertising as the main revenue stream. The broadcaster has spent more than £1bn to date building up its content business to decrease the traditional reliance on TV advertising as the main revenue stream.
ITV has invested in production companies, including many in the US, making it an increasingly attractive proposition to buyers in the current “content is king” era. ITV has invested in production companies, with over half of the division’s revenue now coming from outside the UK, making it an increasingly attractive proposition to buyers in the current “content is king” era.
US companies such as Discovery have been on a spending spree in recent years, buying assets including Skins and Midsomer Murders maker All3Media – jointly with Virgin Media owner Liberty Global which owns a 9.9% stake in ITV – Eurosport and the pan-European rights to the Olympics from 2022.US companies such as Discovery have been on a spending spree in recent years, buying assets including Skins and Midsomer Murders maker All3Media – jointly with Virgin Media owner Liberty Global which owns a 9.9% stake in ITV – Eurosport and the pan-European rights to the Olympics from 2022.
Liberty Global is frequently cited as the most likely buyer of ITV, even though the company has described its stake building as “opportunistic” and not a precursor to a takeover, snapping up assets including Virgin Media.Liberty Global is frequently cited as the most likely buyer of ITV, even though the company has described its stake building as “opportunistic” and not a precursor to a takeover, snapping up assets including Virgin Media.
MTV-owner Viacom, which acquired Channel 5 from Richard Desmond last year, is also likely to be considered a prospective suitor for ITV.MTV-owner Viacom, which acquired Channel 5 from Richard Desmond last year, is also likely to be considered a prospective suitor for ITV.